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Community Benefit Agreements – a New Tool to Reduce Poverty and Inequality

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It is a promising idea: Every time you put up a construction crane, make sure you create opportunities for affordable housing or pathways to jobs in the trades. Economic development can produce opportunities in neighbourhoods across the country. In fact, every land use planning decision and every infrastructure dollar spent could hold this promise.

Through community benefit campaigns, many U.S. cities ensure new economic development creates such opportunities to meet community needs. These campaigns, usually citizen-led, may seek a negotiated agreement with a developer or a local government for a project-specific set of benefits, such as local hiring. These are known as Community Benefit Agreements (CBAs). CBAs are legally enforceable documents. Campaigns also push governments to advance community interests through policy, for example, by asking for mixed-income housing requirements or living wage ordinances.

And CBAs are taking root in Toronto. At Maytree, we think this is good news, as such agreements could work to reduce poverty and inequality in Canadian society, particularly in diverse urban centres.

Of course, governments deliver many programs and services that aim to reduce poverty already. But there is always room for new approaches. Government’s massive spending capacity can be a powerful lever to create local benefits through its procurement of goods and services and the awarding of contracts. Local governments, in particular, hold under-used levers that have the potential to reduce poverty and unemployment, as well as contribute to economic development.

What kind of economic development are we talking about? Property developments in Denver on contaminated land and in Milwaukee in a “distressed” city ward stand out as successes. Other recent campaigns include key agreements that have been signed for the redevelopment of an armory in the Bronx and an army base in Oakland.

In Los Angeles, the birth place of the community benefits movement, a coalition of community, labour, and faith groups has created successful partnerships with developers. Examples include the construction of the Staples Centre and the modernization of the airport, the largest CBA in North America to date. Now attention has turned to the building of new light rail transit lines (LRTs) in Los Angeles. CBAs are a growing trend in the United States where spending on infrastructure such as sewers and water point to billions of dollars in potential economic activity that can be strategically leveraged to meet multiple social aims.

The Toronto Community Benefit Network, a community and labour coalition, has seized the inspiration offered by the movements in Los Angeles and other cities, uniting a broad spectrum of organizations and interests behind Toronto’s first community benefits campaign. The network, with the support of the Atkinson Charitable Foundation, the Metcalf Foundation and United Way Toronto, is pursuing a legal agreement with Metrolinx for the construction of the Eglinton-Crosstown LRT. To date, the campaign has successfully engaged Metrolinx and provincial government decision-makers, and garnered a stated commitment from Metrolinx that the project will involve community benefits.

U.S. examples teach us that community benefit campaigns require key elements to succeed. First, partnership – developers, local government agencies and the community can mutually benefit from the process as long as they share a commitment to “lift all boats,” especially when public dollars are spent. Second, the full participation of the community is essential. For this to happen, a diverse set of community stakeholders must identify a shared set of values to inform the process of negotiating priorities. Here, the process is (in part) the product, as a coalition may work from small to larger victories for a project-specific agreement, eventually pursuing public policy change as they did in Los Angeles.

What can success bring? Multi-sectoral collaborations have demonstrated benefit for the private sector, government and the community: better environmental protections; better job outcomes from big social investment in workforce development; better pathways to careers; and better, more vital neighbourhoods. This isn’t about gentrifying neighbourhoods, but about using economic development as a means to build a more inclusive local economy, while addressing poverty and unemployment at the same time. It contributes to the local economy’s long-term sustainability without displacing people.

The plan to build new transit lines across the Greater Toronto Area presents us with a historic opportunity. Some governments have signaled that they are open to transforming how public infrastructure dollars are spent. If the promise comes to fruition, this would set the bar for the community benefit from public and private development in Canadian cities.

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Maytree is committed to advancing systemic solutions to poverty and strengthening civic communities. We believe the most enduring way to fix the systems that create poverty is to have economic and social rights safeguarded for all people living in Canada.